EM.TV
& Merchandising AG ("EM.TV''), one of the fastest-growing and most
successful media, animated cartoon and retail companies in Europe, and
the Jim Henson Family (Brian, Lisa, Cheryl, John and Heather Henson) owner
of The Jim Henson Company ("Henson''), one of the world's leading
producers and marketers of pre-school, kids and family entertainment,
today announced that they have signed a definitive agreement under which
EM.TV will acquire 100% of Henson in a cash-and-stock transaction notionally
valued at $680 million.

Established
in 1958 and headquartered in Los Angeles (Hollywood), with offices and
production facilities in New York and London, Henson is one of the world's
best-known producer of family entertainment, the creator and exclusive
rights holder of all Sesame Street characters, and effectively owns the
rights to many of the world's premier family entertainment brands. The
company's library comprises more than 450 hours of programming and includes
famous series, TV movies and specials such as The Muppet Show, Jim Henson's
Muppet Babies, Fraggle Rock, numerous Muppet movies and the recent international
successes Bear in the Big Blue House and Farscape.

Thomas
Haffa, Chairman and Chief Executive Officer of EM.TV & Merchandising AG
which he founded in 1989 said, "This acquisition gives us access
to one of the world's most outstanding product libraries, and represents
a major milestone in the development of our company. By acquiring The
Jim Henson Company, we gain some of the most powerful and enduring kids'
and family brands worldwide and get access to the world's biggest and
most important media market. ''In addition, our investment in Henson will
also give us a position in cable networks which will open up new distribution
channels for our own brands. We will also obtain the global rights to
characters and brands offering enormous potential across all media formats
including the Internet," Mr. Haffa added.

Brian
Henson, President, Chief Executive Officer, The Jim Henson Company, said,
"This agreement brings together two great companies led by founding
families who share a deep commitment to offering the very best in family
entertainment, to establishing the combined enterprise as a major global
growth platform, and to building its value for all of its employees, business
partners and millions of customers and fans. I am also personally excited
that with Charlie Rivkin assuming the role of Chief Executive Officer
upon completion of the transaction, I, as Chairman, will be able to devote
my energies to my first love, which is driving the creative and technological
forces of the company.''

Charles
H. Rivkin, President, Chief Operating Officer, The Jim Henson Company,
said, "This transaction is driven by the many growth opportunities
we see for the combined enterprise. EM.TV's many strengths, including
its visionary leadership, marketing skills, financial resources and international
presence, complement our own strengths, including our beloved characters,
unique brand strength and the extraordinary creativity of our people.
In short, the union of The Jim Henson Company and EM.TV is a perfect fit
for everyone concerned.''

Product
Library

Overall,
The Jim Henson Company holds the rights in all categories to more than
450 hours of family programming, which comprise theatrical and TV movies,
series and specials. These include the award-winning series The Muppet
Show, Jim Henson's Muppet Babies and Fraggle Rock as well as the numerous
Muppet movies. More recently, the portfolio has been complemented by other
series successes such as Bear in the Big Blue House, which is currently
airing in the US and UK and is one of the most successful children's shows
on German TV; Construction Site!; Mopatop's Shop, which currently holds
a market share of nearly 40% on British TV; and Donna's Day. The Jim Henson
Company is also a renowned producer of fantasy science fiction shows.
Farscape, the top-rated show on the Sci Fi Channel (US), currently airs
on BBC, where it is also one of the top-rated shows. It will premiere
in Australia later this year. The Jim Henson Company has long-term production
agreements with Odyssey Channel, Capital Cities/ABC and Sony's Columbia
Tristar Home Video in the home video arena. The company has also been
a leader in feature film production for many years. Jim Henson Pictures,
headed by Lisa Henson, was founded jointly with Sony Pictures Entertainment
and has launched the latest Muppet feature films, Muppets From Space and
The Adventures of Elmo in Grouchland.

Sesame
Street

Since
1969, The Jim Henson Company has been the exclusive designer of the characters
on Sesame Street. The show airs in more than 140 countries and is the
winner of more than 50 Emmy Awards. The company holds the underlying rights
to these characters, which are developed in cooperation with the Children's
Television Workshop, the producers of Sesame Street.

Distribution
and Investments in Cable TV Networks

The
Jim Henson Company holds interests in a number of renowned cable TV networks.
An important partnership is the investment in the fast-growing Odyssey
Channel, operated jointly with Hallmark Entertainment. Odyssey Channel
can be received by nearly 30 million cable households. The number of subscribers
is expected to increase to 50 million in the next one to two years. Also
in cooperation with Hallmark Entertainment, The Jim Henson Company operates
the Kermit Channel, which currently airs in Asia. Additionally, The Jim
Henson Company holds a passive 12.5% stake in the recently launched Noggin
Channel, a joint venture between Nickelodeon and Children's Television
Workshop.

Jim
Henson's Creature Shop

Jim
Henson's Creature Shop has offices in London and Los Angeles, and is one
of the premier creature-building workshops in the entertainment industry,
working on both Henson productions and outside projects. The Creature
Shop has received two Academy Awards, one in 1996 for Best Visual Effects
for the hit film Babe, and the other in 1992 for the Henson Performance
Control System. The Creature Shop serves the creature effects and CGI
(computer graphics imagery) needs of the feature film, television, advertising,
theatrical and museum and exhibition arenas globally. Its recent work
is featured in the TV series Farscape, currently airing on Sci Fi Channel
(US) and BBC (UK), and in the feature films George of the Jungle (Disney),
Dr. Dolittle (20th Century Fox), 101 Dalmatians (Disney), The Flintstones
(Universal), Lost In Space (New Line) and the upcoming Flintstones II,
Viva Rock Vegas (Universal).

Interactive

Jim
Henson Interactive (JHI) is responsible for the worldwide digital expression
of all properties owned by the organization including such globally embraced
and commercially successful brands as The Muppets, Farscape, Bear in the
Big Blue House, Mopatop's Shop, Construction Site! and Dark Crystal. The
division recently entered into a long-term relationship with Sony Computer
Entertainment Europe to bring the Muppets to PlayStation as part of the
company's commitment to utilizing its core creative expertise in the interactive
market. JHI also creates and maintains all The Jim Henson Company web
sites including Henson.com, Farscape.com, BearintheBigBluehouse.com and
Donnasday.com.

"We
believe the interactive business segment has huge growth potential for
us,'' said Thomas Haffa.

Consumer
Products, Home Video and Theme Parks

The
Jim Henson Company is one of the world's leading licensors. The characters
are marked under long-standing agreements with renowned manufacturers
and retailers. Over 5000 licensed Muppet products have been introduced
into the marketplace over the past ten years. Hundred of millions of consumer
impressions of the Muppet name are generated through consumer products
and cross promotion. Over 30 million books have been sold in the last
ten years in more than 45 countries and in more than 16 languages, making
Jim Henson Publishing a leading publisher of children's books.

Muppet
Vision 3D, which premiered at Disney/MGM Studios in Orlando, Florida,
in 1991, currently receives more than 12 million visitors per year and
is slated to open at Disney California Adventure in Anaheim, California,
in 2001.

"With
The Jim Henson Company library and its globally known entertainment brands,
EM.TV becomes a major player among media companies around the world. We
are convinced that the two companies form an ideal strategic alliance
with perfectly corresponding business areas. With this transaction, EM.TV
gains a major presence in the US, UK and Asia, highly important media
markets which promise a huge potential for our new and existing brands.
In the future we will develop all classic brands, such as the Muppets,
worldwide, in all media, especially in the growing area of internet and
online distribution,'' concluded Thomas Haffa.

Allen
& Company Incorporated advised The Jim Henson Company with regard to the
transaction.

The
Jim Henson Company, an established leader in family entertainment for
more than 40 years, is an independent multimedia production company; one
of the top character licensors in the industry; a leading publisher of
children's books; and home to Jim Henson Television, Jim Henson Pictures,
Jim Henson Interactive and Jim Henson's Creature Shop(TM). The company
is headquartered in Los Angeles with offices and production facilities
in New York and London. The Jim Henson Company web site is located at:
www.henson.com.

Established
in 1989 by Thomas Haffa, Chairman and CEO, EM.TV & Merchandising AG has
developed into a leading international media company. The company is active
in the production of children's and family programs, worldwide distribution
of TV rights, and marketing of merchandising rights and major international
events. EM.TV is the world market leader in family and children's programming
and the European market leader in merchandising. The portfolio of EM.TV
comprises approximately 28,500 half-hour episodes, which are marketed
nationally and internationally under the brand Junior.

Fan site Muppet Central created by Phillip Chapman. Updates by Muppet
Central Staff. All Muppets, Bear characters are copyright
of The Muppets Studio. Sesame Street characters are copyright of Sesame
Workshop.
Fraggle Rock, Creature Shop and similar likenesses are copyright
of The Jim Henson Company.
Muppet Central is hosted by KnownHost.